The Japanese yen lowered by 0.3% to 105.24 per dollar on Thursday. However, the yen climbed up against other major currencies as the sentiment stayed cautious. Investors’ focus turned to forthcoming European and U.S. data, along with a U.S. fiscal rescue package.
The Chinese yuan was under pressure, lowering to 7.0055 on Thursday. Sino-U.S. relations have deteriorated over issues like the coronavirus pandemic and Beijing’s territorial claims in the South China Sea, as well as its clampdown on Hong Kong.
The Australian dollar plummeted down by 0.8% at $0.7132, and the New Zealand dollar fell by 0.7% to $0.6623. Worries about global tensions with China added to the pressure on risk-off currencies.
The Euro slid down by 0.3% to $1.1745 as well. But it has skyrocketed up by 4.7% against the dollar in July. European confidence figures might support experts’ views of the economic divergence between the eurozone and the U.S., and that supports further gains in the common currency – stated Carol Kong, the analyst at the Commonwealth Bank of Australia.
How did the U.S. dollar fare?
The dollar managed to find a little support on Thursday. The Fed gave no clues about its next moves, beyond an expected promise to keep policy easy. However, the dollar index rebounded by about 0.4% from a two-year low. On the other hand, the riskier currencies fell during the session.
The greenback is slipping into a bit of a trading range. Excitement running into the Fed meeting had died down after the meeting turned out very much as expected – noted Moh Siong Sim, the currency analyst at the Bank of Singapore. According to him, some sort of consolidation is due after the dollar weakness over the past one or two weeks.
Several traders had speculated that the Fed might loosen its approach to inflation. However, now they think that it may happen at the agency’s next meeting in September.